11 August 2017

Africa: Facebook Launches Watch Video Platform and Disney and Fox Change Their Strategy

analysis

Facebook is Africa's largest social media platform: for example, it now has 19 million users in Nigeria. So when it says it's launching a video platform called Watch, both creators and broadcasters need to pay attention. In the same week Disney said it would be setting up its own global SVOD platform and Fox Africa is going to launch its own in South Africa. Russell Southwood looks at what the implications are for the continent.

In use terms, You Tube is currently ahead of Facebook in Sub-Saharan Africa. Alexa rankings in key African markets are as follows: in South Africa You Tube is number three and Facebook is number four; in Nigeria You Tube is also number three and Facebook is number six; in Kenya, You Tube is number three and Facebook is number seven; and in Ghana You Tube is number two and Facebook is number five. In other words, as a video only site You Tube is ahead of Facebook in the overall website rankings.

By far the largest part of traffic through Africa's Internet Exchange Points is You Tube, which has local caching in several countries.

For creators and channel owners, the key question will be whether competition for video content between Facebook and You Tube will generate better revenues for them.

For You Tube creators in Africa, the revenues are very small unless they are generating millions of views on a regular basis. Last autumn at DISCOP Milena Taleb, Head of Video for France and MENA, Believe Digital Studios said:"In Africa, You Tube is the main music streaming platform in user terms and 40-70% of revenues for African artists are coming from You Tube".

She was asked by an audience member what sort of revenues musicians were getting from You Tube: answer, after a lot of qualifications, 0.0 something euros per view. So to make money you need to be capable of generating millions of views. The qualifications are important:"Currently only 8 countries in Sub-Saharan Africa are actually monetized and the RPMs are every low".

Competition from Facebook for advertising alongside video content is unlikely to improve creator and channel revenues as the increase in advertising inventory will probably in the short term drive prices down. However, in the longer-term, if Facebook competes effectively with You Tube in Africa, it may increase the overall size of the digital advertising pot. Since a lot of African video content on You Tube is there for profile rather than revenue, this again may not matter in the short term.

The person who is probably the continent's largest You Tube channel operator, Murphy Anawana, Aforeveo was recently hit by the boycott of international brand advertisers of Google over their ads appearing alongside things like ISIS videos:" "It runs to hundreds of thousands of dollars monthly. We get 100 million views monthly and have over 300 channels. We have a presence in lots of countries. Most African countries have not yet been monetized by You Tube. We are premium partners so we can do the countries that are not covered... it is bouncing back gradually though not yet where it was but we are all excited that things are moving in the right direction."

Facebook did not seem to be as affected by this advertising boycott in the same very direct way in which You Tube was. Therefore when it offers its Watch video platform in Africa, creators and content owners may seek to ensure that "not all their eggs are in the same basket."

Facebook's video platform Watch wants it to be a platform creators and publishers to "find an audience, build a community of passionate fans, and earn money for their work". At the launch it used "old money" TV terms like episodic programmes (live or recorded) and shows and therefore is likely to be more structured and fussy over the content it wants.

Facebook vice-president of media partnerships, Nick Grudin said it wanted "that follow a consistent theme or storyline... Shows are a great format if you want to share a video series, like a weekly cooking show, a daily vlog, or a set of videos with recurring characters or themes." It talks about seeding the creator ecosystem with funding but African creators are unlikely to be first in the queue. Watch will rollout first in the USA and then globally.

Initially there will be a "limited group of creators" but Facebook said the platform will soon roll more widely with content makers already able to register their interest in creating shows. With the launch of Watch, Facebook is also launching 'Show Pages', which are designed to make it easy for people to understand what a show is about, watch episodes and other related videos, and connect with communities that have formed around a show. Watch will be available on mobile, desktop, laptop, and as a part of Facebook's TV apps.

All this in stark contrast to You Tube that remains challenging to navigate and is not well signposted by its creators.

In the same week Disney has announced that it will pull all put its co-production content from Netflix and set up its own SVOD platform in 2019. Disney-owned sports giant ESPN will also be getting its own streaming service. Although there are no numbers from Netflix on Africa use, anecdotally it seems to be getting traction amongst middle class African users and has set up local caching, most notably in Nigeria.

Gary Alfonso, Fox Africa also announced a mini, own version platform. Since FOX content is not to be found on Netflix, a SVOD platform, being driven by the FOX Africa office, will be launched very soon in South Africa.

There are two issues for Africa in terms of this global own-platform trend. Firstly, few users will want to have or indeed probably can afford multiple subscriptions. In my view, they are significantly less likely to use these content house platforms unless they are incredibly cheap.

The same will hold true for these platforms if they are selling one-off items of content. It will have to be incredibly cheap to make sense in most African markets. This will be hard to achieve alongside the global prices that are charged for this kind of content.

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